Don’t count on all that’s been promised

You have every right to be sceptical about all the plans and projects that state finance minister Ajit Pawar will announce when he presents the state budget for 2012-13 on Monday. If the past budgets are anything to go by, it’s likely that many of Pawar’s promises and reforms will remain on paper.

A study of Maharashtra’s 2011-12 budget reveals the huge gap between announcements made by the finance minister and realisation of these goals.

Consider this.

Last year, Pawar allocated a large chunk of the funds – Rs 6,300 crore – to create additional irrigation potential for two lakh hectares, a must if the state wants to improve its agrarian economy. However, in the past year, only half of this amount - Rs 3,597 crore – has been utilised by the various irrigation development boards. Other than the Konkan Board, the other boards are not even aware of how many irrigation projects have been completed and how much potential was created through these funds.

Many announcements made in last year’s budget remain on paper. Pawar, for instance, had promised that anganwadis would be set up in cities to combat urban malnutrition. For this, Rs 10 crore was set aside, but until February 2012 not a single rupee of the allocated money had been touched to build any anganwadis.

In a bid to woo women, the finance minister announced that the state would build women protection centres in every district to provide legal and financial aid so women could fight exploitation. He allocated Rs 8 .74 crore for this project, of which Rs 52.74 lakh has been spent. Not a single centre has been built so far.

Little wonder then that by December 2011, less than one-third of the budget of Rs 42,000 crore had been utilised.

“A cursory look at past budgets reveals that there is little seriousness in the finance ministers’ budget speech. New development schemes are announced, but budgetary provision made for them are rarely utilized,” said Priya Khan, director of Socio Political and Research Kendra, an organisation that studies state budgets and policies. “New taxes and levies are announced every year without studying their impact.”

Khan, who sought data on last year’s budget under the Right to Information Act, was shocked to see that the finance department had no answers on the impact of certain tax provisions introduced last year on state revenues, such as the impact of increasing VAT on sunglasses at 12.5% or reducing VAT on vada pav in restaurants to 5%.

While Pawar has told citizens to brace themselves for new taxes, given the state’s financial condition, he has no answers to offer people on why the state has not been able to recover taxes worth Rs 27,319 crore. Last year, the finance department, in its statement of taxes levied and realised, admitted that of this amount, tax close to Rs 9,247 crore is undisputed but it had no explanation to offer for the non-recovery.